Johnson Controls buys Berg Inc.

By Robert P. Mader Of Contractor's Staff SHREVEPORT, LA. Johnson Controls announced in late June that it has purchased Berg Inc., a mechanical services company headquartered here. Specific terms of the agreement were not disclosed. Berg provides HVAC and plumbing services for commercial and industrial customers throughout Louisiana, east Texas and southern Arkansas. The company currently has 231 employees

By Robert P. Mader
Of Contractor's Staff

SHREVEPORT, LA. — Johnson Controls announced in late June that it has purchased Berg Inc., a mechanical services company headquartered here. Specific terms of the agreement were not disclosed.

Berg provides HVAC and plumbing services for commercial and industrial customers throughout Louisiana, east Texas and southern Arkansas. The company currently has 231 employees and revenues of $38 million.

Berg is helmed by industry stalwart Robert B. Hamm, the 1995 recipient of the Distinguished Service Award, the highest honor of the Mechanical Contractors Association of America.

"We are excited to be joining forces with Johnson Controls," Hamm said. "The employees of both organizations are committed to providing the best service in the marketplace and will now be able to offer a broader range of services to our customers."

Hamm said he wasn't thinking about selling, but the offer from Johnson Controls came at the right time. The new parent gives Berg employees opportunities for training and growth that they would not have had.

"We were at end of our tether as far as growth is concerned," Hamm said.

He will stay at the company under a two-year employment contract, after which he will likely be replaced internally.

"We have talented people in place and Johnson Controls recognizes the depth of the management team we have here," he said.

Johnson Controls and Berg have the same philosophies of commitment to customers and to integrity, Hamm said.

The purchase will give customers of both companies access to services that they previously didn't get, said James Mylett, vice president and general manager of the South region for Johnson Controls. Berg customers will be able to get performance contracting, he noted, while existing Johnson customers will get improved mechanical service. The acquisition gives Johnson Controls access to Berg's talented employees and offers those employees more career opportunities, he said.

"One other thing that we're excited about is that when we integrated with the Cal-Air organization in California, we learned a tremendous amount about how to serve customers on a local basis," Mylett said. "We expect to learn the same types of things with the Berg organization and improve our ability to serve customers throughout the region."

Johnson Controls bought out the stock in Cal-Air's ESOP in 2004 after the contractor's management decided that it needed to find ways to recapitalize the company(November 2004, pg. 1). Cal-Air President Casey Condron became a regional vice president for Johnson Controls

Johnson Controls has 18 branches in seven states in the South region, Mylett said, one of nine regions for Johnson's service organization. Many of the branches are in major metro areas, but it has offices in smaller towns such as Corpus Christi, Texas. The operations have as many as 150 service trucks and as few as 10, he said. The majority of the operation's growth has been organic.

Johnson faces the same industrywide problem of finding good help, so it is trying a combination of nurturing homegrown talent and being the employer of choice.

Chris H. Berg founded Berg Inc. in 1929 as Shreveport Plumbing Co. The name was changed to Berg Mechanical Inc. in 1964 when a Dallas office was opened, and again to Berg Inc. in 1993.

The firm's workload is 50:50 new construction and service. Berg runs more than 80 service vehicles and has thousands of service customers. While many of those customers are under service agreements, much of the work is demand service, retrofits and equipment change-outs, Hamm said.